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The Ontario Superior Court recently considered whether an employer was entitled to plead cause in a wrongful dismissal lawsuit after the issue had been decided in earlier proceedings under the Employment Insurance Act. The case illustrates the risk an employer takes when it participates in EI proceedings.

The employer in Korenberg v. Global Wood Products Ltd.dismissed a night supervisor for cause. The employee was initially denied EI benefits on the basis that his dismissal was the result of his own misconduct. He successfully appealed this decision to the EI Board, which found that the employer had failed to prove misconduct. The employer then appealed the Board’s decision to an EI Umpire, who upheld the Board’s decision.

In his subsequent wrongful dismissal lawsuit, the employee argued that the question of cause for his dismissal had already been determined by the EI Umpire and so the only issue left to be decided was the amount of his damages. The Court agreed, finding that if the issues and parties are the same and the decision in a previous proceeding is final and judicial, the doctrine of issue estoppel will normally prevent the parties from retrying those issues in a subsequent proceeding. The Court decided that the employer was not entitled to another chance to make out its case for cause.

Although the cases on this issue are inconsistent, Korenberg demonstrates that when an employer considers whether to contest an EI decision it must carefully assess whether it might prejudice its case in a later wrongful dismissal action.